Reducing the Cost of Healthcare

Financial Planning Read time 4mins
01 Mar 2024
Now Reading: Reducing the Cost of Healthcare
With the rising cost of living, some retirees on fixed incomes are feeling the pressure. Healthcare costs can be a particular source of concern, as medical bills tend to build up in later years of retirement. The Commonwealth Seniors Health Card (CSHC) is designed to reduce the impact of health-related costs and it is now more accessible due to recent increases in income test cut offs. Some self-funded retirees, even those not eligible for the Age Pension, may be surprised to learn they now qualify.


The Commonwealth Seniors Health Card (CSHC) is means tested and thus your eligibility to receive the card is based on select criteria. Individuals must have reached age pension age (for most people that’s 67), reside in Australia and be an Australian citizen (or have an appropriate Visa). Claimants of the CSHC cannot also be receiving benefits from Centrelink or the Department of Veterans’ Affairs. This is because the CSHC is aimed to assist self-funded retirees.

Financially, eligibility for a CSHC is subject to an income test but not an asset test, unlike the Age Pension. For an individual to be eligible, they must earn less than $95,400 per annum while couples must jointly earn less than $152,640 per annum in adjusted taxable income. Even if only one member of a couple has reached eligibility age, you can still submit an application for that person, but the couples income test will apply.

For self-funded retirees, superannuation is assessed favourably as it may be excluded from the income test or assessed at a set ‘deeming rate’ irrespective of the actual income generated by the super fund. Importantly, if you’re under 67, superannuation that is in “accumulation phase” is not deemed at all. So, for couples who are close to the income cut-off and one member is under eligibility age, there is the potential to undertake superannuation rebalancing strategies to reduce the amount of superannuation that is deemed. This is a complex strategy area that may be applicable to you or your family, so the details should be worked through with an experienced Evans and Partners financial adviser.

CSHC benefits

Owning the CSHC comes with practical benefits designed to make healthcare more affordable. This includes:

  1. Cheaper medicine: The Pharmaceutical Benefits Scheme (PBS) provides access to a wide range of medicines at reduced rates. Under the PBS, the maximum cost for a pharmaceutical benefit item at a pharmacy is $31.60 for general patients. Importantly, this reduces to $7.70 – a difference of $23.90 per item – for holders of a CSHC.
  2. Bulk billed appointments: Select general practitioners (GPs) will provide bulk billing for medical appointments. This is often at the discretion of the GP’s practice, but a CSHC may allow for a discount.
  3. Extended Medicare Safety Net (EMSN): Under the EMSN, individuals are entitled to higher rebate amounts once their total gap and out-of-pocket costs reach select thresholds. For ordinary Medicare card holders, the threshold is $2,544.30 in out-of-pocket costs. This is reduced to $811.80 for CSHC holders making it easier to access valuable rebates.
  4. State and local government concessions: Depending on your location, there are a range of concessions available to CSHC holders. These concessions may include discounted public transportation, lower utility bills, and reduced fees for recreational activities. These perks can help seniors lead a better quality of life and stay active in their communities.

Progressing your application

Following the introduction of caps on superannuation pensions, self-funded retirees may be surprised to find they now qualify for the CSHC. So, even if you’re not eligible for the Age Pension, it may be worth investigating whether you can claim the CSHC and if your income is on the edge of the cutoff thresholds, understand your options for restructuring assets. As this may impact on your broader tax and financial position it is important to speak with a financial adviser before making major changes to your assets.

Once you have spoken to your financial adviser, individuals can request an assessment and apply by logging into your MyGov account (provided it is linked to Centrelink) or by visiting a Centrelink service center.

Saurav Patel
Investment & Strategy Adviser

Important Disclosures

This document was prepared by Evans and Partners Pty Ltd (ABN 85 125 338 785, AFSL 318075) (“Evans and Partners”). Evans and Partners is a wholly owned subsidiary of E&P Financial Group Limited (ABN 54 609 913 457) (E&P Financial Group) and related bodies corporate.

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